Revolution in the Pipeline - Part 2: Speed, Safety, and Sustainability in Oil and Gas Industry

The article argues that the next wave of transformation in oil and gas hinges on 5G for high-speed, low-latency connectivity, AI for proactive safety and maintenance, and IoT for emissions reduction and resource efficiency, collectively driving faster, safer and more sustainable operations. However, despite widespread digitalization efforts and numerous pilots, most companies remain stuck at the proof-of-concept stage, underscoring an urgent need to industrialize these technologies at scale to stay competitive and avoid falling behind amid stricter climate and safety expectations.

Written by

Tuan Minh Tran

Published on

August 10, 2023

In the previous part of this series, we explored three major technologies reshaping the oil and gas industry: RPA, SAP S/4HANA and blockchain. These solutions help organizations build greater resilience, but resilience alone is no longer sufficient.

Today, the industry is increasingly driven by the need for higher operational speed enabled by 5G, the imperative to enhance safety with AI, and the growing emphasis on sustainability supported by IoT. Together, these forces are defining the next wave of digital transformation in oil and gas.

To revisit the first part of this series and its foundational technologies, follow the link below: Revolution in the Pipeline – Part 1: Disrupting Oil and Gas Industry with Technologies.

High-speed connectivity as a core requirement

With its complex operations and vast geographical spread, the oil and gas industry has long been a fertile ground for technological innovation. However, the need for reliable, high-speed connectivity in remote offshore locations remains a major challenge. McKinsey estimates that 40% of production is still supported by outdated technology that suffers from significant reliability and bandwidth issues [1].

The introduction of 5G networks directly addresses this hurdle by providing high-speed, low-latency communication. This enables real-time data transmission and remote control of operations, reducing the need for human presence in hazardous environments. With 5G's ultra-high-speed data transfer capabilities, large volumes of information from sensors, equipment, and remote sites can be transmitted and analyzed in real time, supporting faster decision-making and rapid responses to critical events.

Furthermore, 5G supports seamless remote monitoring and control of critical oil and gas assets, including pipelines, wells, and refineries. The deployment of drones and robotics, powered by 5G connectivity, enables safer and more efficient inspections, monitoring, and maintenance. On average, offshore oil and gas organizations experience more than 27 days of unplanned downtime annually, resulting in financial losses of up to USD 38 million [2]. By harnessing the power of 5G, oil and gas companies can mitigate downtime risks and significantly enhance operational efficiency.

Ensuring safety with AI

Safety risks in oil and gas operations

One of the major challenges in the oil and gas industry is detecting improper threading in pipelines and defects in critical mechanisms. When such issues are only discovered at the end of the production line due to upstream problems, they can cause substantial operational and financial losses. In addition, exposure of oil and gas components to fluctuating temperatures and harsh environmental conditions often accelerates material degradation and corrosion, leading to component deformation and weakened pipelines.

Consequences of inadequate maintenance: the PG&E case

A striking illustration of the risks associated with inadequate maintenance comes from California's largest utility, Pacific Gas & Electric. The company faced severe consequences after being held responsible for a tragic wildfire accident in 2018. Post-incident research reports indicated that one of the primary causes was incorrect maintenance procedures. Moreover, the emergency system had been disconnected and was non-functional at the time of the event.

As a result, the company incurred substantial penalties, including approximately USD 13.5 billion in compensation for individuals who lost homes and businesses, along with an additional fine of USD 2 billion imposed by the California Public Utilities Commission for negligence [3].

How AI technologies enhance safety

To address these safety and reliability issues, deploying computer-vision-based systems can be highly effective in detecting defects through automated analytics. AI technologies are capable of identifying signs of corrosion by analyzing multiple parameters with the support of knowledge graphs and predictive intelligence. In particular, AI can approximate when and where corrosion is likely to occur and proactively alert pipeline operators.

This proactive approach enables companies to:

Manage corrosion risks more effectively across assets and infrastructure.
Predict machinery downtimes with greater accuracy.
Plan maintenance activities in a timely and cost-efficient manner.

With the global AI in oil and gas market projected to reach USD 7.99 billion by 2031 [4], operators have a significant opportunity to leverage AI to enhance workplace safety for their employees while strengthening the resilience of their operations.

Fostering sustainability with IoT

IoT technology has pushed the oil and gas sector to the forefront of industrial innovation. As IoT is projected to become an USD 11 trillion industry by 2025 [5], it is already reshaping how companies approach environmental performance. As a resource-intensive industry with global impact, oil and gas is under mounting pressure to shrink its ecological footprint, cut carbon emissions, and conserve finite resources.

Research by McKinsey shows that the oil and gas industry is the second-largest single contributor to climate change, responsible for around 42% of global greenhouse gas emissions [6]. In this context, complying with sustainability requirements and climate policies is no longer optional.

By leveraging IoT-enabled leak detection and predictive maintenance, oil and gas firms can significantly reduce fugitive emissions and flaring. Downstream operators, in particular, can use IoT to lower the industry's carbon footprint and support long-term sustainability goals. When sustainable practices are embedded into operations, companies can enhance efficiency, safeguard their license to operate, minimize waste, and contribute to improving ecological outcomes for future generations.

The strategic importance of sustainability is increasingly reflected at the leadership level. A recent survey by SAP and Oxford Economics reveals that energy and utilities executives have made more sustainability-related changes to their operations than those in other industries. Notably, 79% of companies reported that sustainability is a significant concern or top-of-mind at all stages of the manufacturing process [7]. Complementing this, research by KPMG indicated that 97% of oil and gas executives agree that their ability to manage climate-related risk is critical to keeping their jobs over the next five years [8].

IoT also drives sustainability through productivity gains. Smart optimization can shorten operating times, while connected devices enable real-time monitoring of drilling parameters such as pressure, temperature, and equipment performance. This, in turn, supports immediate adjustments and more efficient drilling. As highlighted by McKinsey, the adoption of IoT technology has delivered efficiency improvements for 83% of organizations, boosting productivity by an estimated 10 to 12% [9].

Drawing on this momentum, FPT has been providing IoT services and solutions for decades across industries ranging from home applications and smart cities to manufacturing, entertainment, retail, and healthcare. With thousands of skilled engineers and industry experts, FPT empowers organizations to strengthen safety, enhance security, and improve energy efficiency.

The future is here

Oil and gas companies are actively pushing toward a more digitalized future, yet the industry’s overall technological progress still lags behind its ambitions. According to McKinsey research, although almost every company has launched digitization projects across different parts of their operations, 70% have not moved beyond the pilot phase [10].

This gap suggests a pressing need to scale and fully embed digital technologies across the value chain. Without doing so, oil and gas enterprises risk falling behind in an increasingly competitive and fast-evolving market.

Frequently Asked Questions

How are 5G, AI, and IoT reshaping oil and gas beyond resilience?

Oil and gas is shifting from simply surviving volatility to competing on speed, safety, and sustainability. 5G delivers real-time connectivity, AI improves safety and asset integrity, and IoT reduces emissions and waste. Together, they unlock faster operations, fewer incidents, and greener performance across the value chain.

Why is 5G connectivity critical for modern oil and gas operations?

5G provides high-speed, low-latency links for complex, dispersed assets, especially offshore. It enables real-time sensor data, remote control of equipment, and safe use of drones and robots. This cuts hazardous site visits, reduces unplanned downtime, and supports faster, more informed operational decisions.

How can AI detect defects and degradation in pipelines and assets?

AI uses computer vision and predictive analytics to analyze images, sensor data, and maintenance records. It flags improper threading, mechanical defects, and early signs of corrosion before failure. This enables proactive maintenance, reduces safety incidents, and helps avoid severe losses and regulatory penalties.

How do IoT solutions help oil and gas meet sustainability goals?

IoT networks connect sensors that monitor emissions, leaks, and energy use in real time. Operators can detect fugitive leaks, cut flaring, and optimize equipment to lower fuel and power demand. This lowers carbon footprint, improves compliance, and boosts efficiency and productivity across assets.

Why are many oil and gas firms stuck in digital pilot purgatory?

Most companies have many digital pilots but lack scaled deployment, with about 70% not moving beyond trials. Barriers include siloed projects, unclear ROI, and change resistance. Executives need a clear roadmap, stronger governance, and enterprise-level scaling plans to capture full value.